Valvoline Inc.: Initiation Of Coverage – Will The Improvements in Non-Oil-Change Revenues and Premiumization Continue To Happen?

Valvoline Inc., a leading worldwide marketer and supplier of premium branded lubricants and automotive services, reported robust results for the first quarter of fiscal 2024. The company’s strong performance was marked by a robust top-line growth with system-wide store sales growing 12.3% to $723 million. Both company and franchise same-store sales expanded respectively with 6.1% and 8% growth. The franchise side saw modestly better growth powered primarily by enhancements in non-oil-change revenue service penetration. Profitability was in tune with expectations, and the company made deceptive progress on returning a significant portion of the net proceeds from the sale of global products to shareholders through share repurchases.